On Friday 21 October 2011, the Bankruptcy Court in the Southern District of New York handed down an important decision, confirming that foreign (groups of) companies can use Chapter 11 without any significant threshold as to their nexus with the United States. This may be good news for corporates that seek to use Chapter 11 for restructuring their business or capital structure.

It is now clear that even very limited property in the U.S. is sufficient to qualify for a reorganisation through Chapter 11.

You are busy people.  There is too much information. To try to help you identify the issues that are most important to you, we present a round-up of ten of the most significant cases and events in 2011, including Supreme Court decisions on contractual interpretation, the removal of expert witness immunity and the status of arbitrators, together with the coming into force of the Bribery Act 2010 and the new ICC Rules.

The signs for the leveraged finance market in 2011 are mixed. Questions remain as to whether this year will see a fresh spate of restructurings and/or continued growth in primary issuance. Whilst data compiled by Fitch Ratings has shown that European PE backed company default rates slowed in 2010 (and premier league spending during the January transfer window topped £225 million compared with £30 million last year), the primary leveraged finance market has started slowly this year.

On 6 January 2011, the European Commission (the “Commission”) published a consultation paper on the technical details of a possible EU framework for bank recovery and resolution (the “Consultation Paper”).1 The paper follows the communication from the Commission dated 20 October 2010 on an EU framework for crisis management in the financial sector (the “Communication”).2

Restructuring companies in respect of which there exists a significant credit default swaps (CDS) market adds an additional level of complexity which the debtor and all stakeholders should consider and assess early on in the process, as it could determine the success or failure of a restructuring plan.

On 22 February the European Council published guidelines for the rescue and restructuring of financial institutions. The objective of the initiative is to maintain a level playing field between member states granting state aid measures for the rescue and/or restructuring of a financial institution in difficulty.

Summary and implications

Almost exactly one year on from the Order* coming into force, many people remain unaware that it is no longer possible to appoint an administrative receiver over an overseas incorporated company.

Lenders and indeed insolvency practitioners should be aware that this is the case even when dealing with qualifying floating charges created before 15 September 2003 but alternative strategies, including administration, may be pursued to the same effect.

Administrative receivership

Summary

In one of the most eagerly awaited appeals to affect the restructuring and insolvency community since MyTravel, the Court of Appeal in the European Directories case ruled on Friday 22 October that:

 Summary

In its communication on an EU framework for crisis management in the financial sector dated 20 October 2010, the European Commission set out several major legislative proposals aimed at preventing a repeat of the recent bank failures that necessitated significant state aid.

CEIOPS holds annual conference: CEIOPS has held its annual conference. The event included a panel session on Solvency II and discussion by Sharon Bowles of the new European Supervisory Authorities.